The US dollar recovered some of Thursday’s losses and is trading at 98.74 as traders booked profits after the greenback soared to trade at 99.20 during
The dollar slipped a little against the euro on Thursday as expectations firmed on a Federal Reserve interest rate increase in December. The euro edged up to $1.081 but gave back those gains in the Asian session Friday morning to trade at 1.0793.
The Wall Street Journal said its poll of economists had found about 92 per cent see a hike at the Fed’s Dec 15-16 policy meeting in the benchmark federal funds rate, held near zero since December 2008. In early October, before last week’s strong US jobs report, 65 per cent of forecasters predicted a December lift-off, the newspaper said. Investors have also grown more confident in a December hike. The CME Group’s Fed futures watch tool put the probability of a December hike at 70 per cent.
Asian shares are trading lower after a sharp decline in commodity prices on concerns that sluggish global growth may worsen the supply glut, while the investors remain edgy that the US Federal Reserve may hike interest rates in the month of December. Meanwhile, crude oil prices hit two-and-a-half-month lows on Thursday on oversupply glut.
Japan’s Nikkei, Hong Kong’s Hang Seng and China’s Shanghai Composite have slumped between 1.2-2.5%. Investors are likely to keenly await US data on imports and exports, foreign reserves and PPI numbers, scheduled today. The Japanese yen is trading quietly in the morning session paying little heed to the climb in the greenback. The Conference Board said that a leading index for the Japanese economy skidded in September, falling 0.8 percent following the 0.1 percent increase in August. The coincident index gained 0.5 percent following the 0.2 percent fall in the previous month. Industrial production printed a bit higher than expected but not notable while the Tertiary index came in much lower than forecast leveling the yen on a weak note. The USDJPY is trading flat at 122.61 and against the euro at 132.22.
Also in Asian the Australian dollar diverged from the kiwi with the Aussie gaining 4 points to 0.7130 remaining positive after yesterday’s outstanding jobs report. The kiwi is light by 5 points at 0.6542 as traders review their expectations from the central bank in coming weeks.